Ten States Where Manufacturing Matters

In July, America’s manufacturing sector grew for the second month in a row. This improvement is in line with longer-term trends, according to the Institute for Supply Management. While some experts are predicting a revival, manufacturing has lagged the economy for years. The country has lost nearly 2.5 million manufacturing jobs in the last 10 years.

Last year, the manufacturing sector was responsible for 12% of the nation’s total economic output. In Indiana, the state where manufacturing contributes most, the figure was 28.2%. 24/7 Wall St. reviewed the 10 states where manufacturing represented the largest total share of the state economy.

The states with the biggest manufacturing economies specialize in different industries. In Oregon, nearly $38 billion of the state’s $50 billion manufacturing sector came from computer and electronic product manufacturing. In Louisiana, more than 10% of the state’s entire economic output in 2011 came from the manufacturing of petroleum and coal-based products. Michigan and Indiana both have sizable auto industries, with Michigan’s auto industry accounting for slightly less than a third of all its manufacturing output in in 2011.

During the recession, and in many cases before the recession even started, many states with high manufacturing employment faced steep job losses. Between January 2007 and mid-2009, Indiana lost more than 100,000 manufacturing jobs. In Michigan, nearly 125,000 manufacturing jobs were lost between January 2008 and January 2009 alone.

Now, many of these states have seen employment rebound. Michigan had the fastest manufacturing job growth in the nation from the end of 2009 to the end of 2011. According to Chad Moutray, chief economist at the National Association of Manufacturers, “the auto sector has been one of the driving sectors in the economy, pardon the pun, over the course of the last couple of years.” In addition to Michigan, many parts of the Midwest benefited as well, he added. In Indiana, manufacturing employment has risen more than 3.5% a year for each of the past three years, especially impressive in the context of the nation’s slow job growth overall.

While some believe that the benefits of a potential manufacturing renaissance are largely a myth, Moutray told 24/7 Wall St. that investments in manufacturing has a positive impact on the economy overall. He also noted that the prospect of added manufacturing jobs may appeal to many Americans because manufacturing jobs pay well.

To identify the 10 states where manufacturing matters, 24/7 Wall St. used state gross domestic product (GDP) figures published by the Bureau of Economic Analysis for 2012. We determined from these data which states had the largest percentage of output attributable to manufacturing. Data on specific industries within the manufacturing sector from 2011 represent the most recent available figures. Employment figures for each state come from the Bureau of Labor Statistics and are seasonally adjusted. Seasonally adjusted manufacturing job totals were not available for Alabama and Oklahoma.